Which economist is credited with originating the use of supply and demand analysis?
A. Vernon Smith
B. Adam Smith
C. Alfred Marshall
D. John Maynard Keynes
C. Alfred Marshall
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________ is/are the payment for the factor of production ________
A) Rent; capital B) Wages; capital C) Interest; labor D) Profit; entrepreneurship
Consider a market with inverse demand p = 100 – 2Q. Firms have no fixed cost and constant marginal cost c
a. Derive the firms' outputs and profits when this market is served by Cournot duopolists. b. How do outputs and profits vary with c? Specifically, use calculus to find the derivative of the output of each firm and profit of each firm with respect to c. c. Suppose the firm's also have a fixed cost of F in addition to the marginal cost c. How does F alter the best response functions and NE? Explain in words. (For technical reasons, assume that both firms still produce a positive level of output in equilibrium)
In long-run equilibrium under perfect competition,
a. the firm and the industry will have the same cost curves. b. only a very few firms will be earning economic profits. c. the demand curves facing individual firms will fall to the level of minimum AC. d. individual firms will tend to increase their outputs.
The City of Greenville needs to raise revenue. Alderman Black has proposed a $10 tax on red cars in the city, currently numbering 2,000 . Mayor White, who wants more than $20,000 in revenue, proposes taxing these cars at $100 each. Councilwoman
Bluestone goes even farther, suggesting a $1,000 per red car tax, arguing that her proposal will raise $2 million. If maximizing tax revenue is the only consideration, which proposal should pass? Why?